Magellan Petroleum Corporation provides an update on the Evans Shoal transaction. The conditions to completion of the Evans Shoal transaction were not satisfied by May 31st. Magellan and Santos have acknowledged that the Evans Shoal transaction will now not close.
The Company has commenced discussions with Santos with the intention of agreeing with Santos, in the near future, on an appropriate resolution of all issues relating to the Evans Shoal transaction. The Company and Santos will continue these discussions in good faith, provided there is a basis for reaching an appropriate resolution. In the meantime, the Company will continue to reserve all its rights and claims against Santos.
The Company’s position is that it is entitled to sums deposited in connection with the Evans Shoal transaction contemplated by the Assets Sale Deed, as amended. The Company said that it does not accept Santos’ assertion in Santos’ press release of 31 May 2011 that “Santos will also retain a $15 million non-refundable deposit paid by Magellan” and regards the treatment of this sum as a matter to be resolved between the parties.
Given the discussions with Santos, the Company has elected to forbear upon its rights with regard to completing the final closing under the Securities Purchase Agreement dated August 5, 2010 between the Company and Young Energy Prize SA, as amended, and has reserved its rights under that Agreement.
Magellan strongly believes in the future value of Methanol in the world’s energy mix. Magellan continues to be focused on maximizing the value of its existing portfolio of assets in Australia, the USA and the UK. As part of their ongoing discussions, Santos and Magellan are exploring rationalization plans for their common interests in the Amadeus and Bonaparte basins, Northern Territory, Australia.
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Source: Magellan Petroleum, June 17, 2011;